HUD 52531B Agreement to Enter Into Housing Assistance Payments Cont

AGREEMENT TO ENTER INTO
HOUSING ASSISTANCE PAYMENTS
CONTRACT

U.S. Department of Housing
and Urban Development
Office of Public and Indian Housing

AGREEMENT/CONTRACT NUMBER: ____________________
U.S. Department of Housing and Urban Development
Section 8 Housing Assistance Payments Program
Section 8 Certificate Program
Project Based Assistance

PART II OF THE
AGREEMENT TO ENTER INTO HOUSING ASSISTANCE PAYMENTS CONTRACT
2.1

TRAINING, EMPLOYMENT AND CONTRACTING OPPORTUNITIES FOR BUSINESSES
AND LOWER-INCOME PERSONS.
(a)

The project assisted under this Agreement is subject to the requirements of Section 3 of
the Housing Urban Development Act of 1968, as amended, 12 U.S.C 1701u. Section 3
requires that to the greatest extent feasible, opportunities for training and employment be
given lower-income persons residing within the unit of local government or the metropolitan area (or nonmetropolitan county), as determined by the Secretary, in which the
project is located and contracts for work in connection with the project be awarded to
business concerns which are located in, or owned in substantial part by persons residing
in, the same metropolitan area , (or nonmetropolitan county) as the project.

(b)

Notwithstanding any other provision of this Agreement, the Owner shall carry out the
provisions of Section 3 and the regulations issued by HUD as set forth in 24 CFR, Part
135, and all applicable rules and orders of HUD issued thereunder prior to the execution
of this Agreement. The requirements of the regulations include, but are not limited to,
development and implementation of an affirmative action plan for utilizing business
concerns located within, or owned in substantial part by persons residing in, the area of
the project; the making of a good faith effort, as defined by the regulations, to provide
training, employment, and business opportunities required by Section 3; and incorporation of the “Section 3 clause” specified by Section 135.20(b) of the regulations and
paragraph (d) of this section in all contracts for work in connection with the project. The
Owner certifies and agrees that he or she is under no contractual or other disability which
would prevent compliance with these requirements.

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(c)

Compliance with the provisions of Section 3, the regulations set forth in 24 CFR, Part
135, and all applicable rules and orders issued by HUD thereunder prior to execution of
this Agreement, shall be a condition of the Federal financial assistance provided to the
project, binding upon the Owner, the Owner’s contractors and subcontractors, successors,
and assigns. Failure to fulfill these requirements shall subject the Owner, the Owner’s
contractors and subcontractors, successors, and assigns to the sanctions specified by this
Agreement, and to such sanctions as are specified by 24 CFR, Section 135.135.

(d)

The Owner shall incorporate or cause to be incorporated into any contract or subcontract
for work pursuant to this Agreement in excess of $50,000 cost, the following clause:

“EMPLOYMENT OF PROJECT AREA RESIDENTS AND CONTRACTORS”
“A.

The work to be performed under this Contract is on a project assisted under a program providing
direct Federal financial assistance from HUD and is subject to the requirements of section 3 of
the Housing and Urban Development Act of 1968, as amended, 12 U.S.C. 1701u. Section 3
requires that, to the greatest extent feasible, opportunities for training and employment be given
to lower-income persons residing within the unit of local government or the nonmetropolitan area
(or nonmetropolitan county), as determined by the Secretary, in which the project is located and
contracts for work in connection with the project be awarded to business concerns which are
located in, or owned in substantial part by persons residing in, the same metropolitan area (or
nonmetropolitan county) as the project.

“B.

The parties to this Contract will comply with the provisions of Section 3 and the regulations
issued by HUD as set forth in 24 CFR, Part 135, and all applicable rules and orders of HUD
issued thereunder prior to the execution of the Agreement. The parties to this Contract certify
and agree that they are under no contractual or other disability which would prevent them from
complying with these requirements.

“C.

The contractor will send to each labor organization or representative of workers with which the
contractor has a collective bargaining agreement or other contract or understanding, if any, a
notice advising the labor organization or workers’ representative of the commitments under this
Section 3 clause and shall post copies of the notice in conspicuous places available to employees
and applicants for employment or training.

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“D.

The contractor will include this Section 3 clause in every subcontract for work in connection with
the project and will at the direction of the applicant for or recipient of Federal financial assistance, take appropriate action pursuant to the subcontract upon a finding that the subcontractor is
in violation of regulations issued by HUD, 24 CFR, Part 135. The contractor will not subcontract
with any subcontractor where the contractor has notice or knowledge that the latter has been
found in violation of regulations under 24 CFR, Part 135, and will not let any subcontract unless
the subcontractor has first provided the contractor with a preliminary statement of ability to
comply with the requirements of these regulations.

“F.

Compliance with the provisions of Section 3, the regulations set forth in 24 CFR, Part 135, and
all applicable rules and orders of the Department issued thereunder prior to the execution of the
Agreement to Enter Into Housing Assistance Payments Contract, shall be a condition of the
Federal financial assistance provided to the project, binding upon the Owner, the Owner’s
contractors, and subcontractors, successors, and assigns. Failure to fulfill these requirements
shall subject the Owner, the Owner’s contractors, successors, and assigns to those sanctions
specified by the Agreement to Enter Into Housing Assistance Payments Contract, and to such
sanctions as are specified in 24 CFR, Section 135.135.”

(e)

The Owner agrees to be bound by the above Section 3 clause with respect to his or her own
employment practices when participating in federally assisted work.

2.2

EQUAL EMPLOYMENT OPPORTUNITY

(a)

The Owner shall incorporate or cause to be incorporated into any contract in excess of $10,000
cost for construction work, or modification thereof, as defined in the regulations of the Secretary
of Labor at 41 CFR, Chapter 60, which is to be performed pursuant to this Agreement, the
following Equal Opportunity clause:

“EQUAL EMPLOYMENT OPPORTUNITY”
“During the performance of this contract, the contractor agrees as follows:
“(1)

The contractor will not discriminate against any employee or applicant for employment because
of race, color, creed, religion, sex, or national origin. The contractor will take affirmative action
to ensure that applicants are employed, and that employees are treated during employment,
without regard to their race, color, religion, creed, sex, or national origin. Such action shall
include, but not be limited to, the following: employment, upgrading, demotion, or transfer;
recruitment or recruitment advertising; layoffs or termination; rates of pay or other forms of
compensation; and selection for training,

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including apprenticeship. The contractor agrees to post in conspicuous places, available to
employees and applicants for employment, notices setting forth the provisions of this Equal
Opportunity clause.
“(2)

The contractor will, in all solicitations or advertisements for employees placed by or on behalf of
the contractor, state that all qualified applicants will receive consideration for employment
without regard to race, color, religion, creed, sex, or national origin.

“(3)

The contractor will send to each labor union or representative of workers with which the contractor has a collective bargaining agreement or other contract or understanding, a notice to be
provided by or at the direction of the Government advising the labor union or workers representative of the contractor’s commitments under this section, and shall post copies of the notice in
conspicuous places available to employees and applicants for employment.

“(4)

The contractor of will comply with all provisions of Executive Order No. 11246 of September
24, 1965, and of the rules, regulations, and relevant orders of the Secretary of Labor.

“(5)

The contractor will furnish all information and reports required by Executive Order No. 11246 of
September 24, 1965, and by the rules, regulations, and orders of the Secretary of Labor, or
pursuant thereto, and will permit access to its books, records, and accounts by HUD and the
Secretary of Labor for purposes of investigation to ascertain compliance with such rules, regulations and orders.

“(6)

In the event of the contractor’s noncompliance with the Equal Opportunity clauses of this contract or with any of the rules, regulations, or orders, the contract may be canceled, terminated, or
suspended in whole or in part and the contractor may be declared ineligible for further contracts
in accordance with procedures authorized in Executive Order No. 11246 of September 24, 1965,
and such other sanctions as may be imported and remedies invoked as provided in Executive
Order No. 11246 of September 24, 1965, or by rule, regulation, or order of the Secretary of Labor
or as otherwise provided by law.

“(7)

The contractor will include the portion of the sentence immediately preceding Paragraph (1) and
the provisions of Paragraphs (1) through (7) in every subcontract or purchase order unless
exempted by the rules, regulations, or orders of the Secretary of Labor issued pursuant to Section
204 of Executive Order No. 11246 of September 24, 1965, so that such provisions will be binding
upon each subcontractor or vendor. The contractor will take such action with respect to any
subcontract or purchase order as the Government may direct as a means of enforcing such
provisions including sanctions for noncompliance; provided, however, that in the event a contractor becomes involved in,

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or is threatened with, litigation with a subcontractor or vendor as a result of such direction by the
Government, the contractor may request the United States to enter into such litigation to protect
the interest of the United States.”
(b)

The Owner agrees to be bound by the above Equal Opportunity clause with respect to his or her
own employment practices when participating in federally assisted construction work.

(c)

The Owner agrees to assist and cooperate actively with HUD and the Secretary of Labor in
obtaining the compliance of contractors and subcontractors with the Equal Opportunity clause
and the rules, regulations, and relevant orders of the Secretary of Labor, to furnish HUD and the
Secretary of Labor such information as they may require for the supervision of such compliance,
and to otherwise assist HUD in the discharge of HUD’s primary responsibility for securing
compliance.

(d)

The Owner further agrees to refrain from entering into any contract or contract modification
subject to Executive Order No. 11246 of September 24, 1965, with a contractor debarred from, or
who has not demonstrated eligibility for, Government contracts and federally assisted construction contracts pursuant to the Executive Order and will carry out such sanctions and penalties for
violation of the Equal Opportunity clause as may be imposed upon contractors and subcontractors by HUD or the Secretary of Labor pursuant to Part II, Subpart D of the Executive Order. In
addition, if the Owner fails or refuses to comply with these undertakings, HUD may take any or
all of the following actions; cancel, terminate, or suspend in whole or in part this Agreement;
refrain from extending any further assistance to the Owner under the program with respect to
which the failure or refusal occurred until satisfactory assurance of future compliance has been
received from the Owner, and refer the case to the Department of Justice for appropriate legal
proceedings.

2.3

CLEAN AIR ACT AND FEDERAL WATER POLLUTION CONTROL
In compliance with regulations issued by the Environmental Protection Agency (EPA), 40 CFR,
Part 15, pursuant to the Clean Air Act, as amended (Air Act), 42 U.S.C. 7401, et seq., the Federal
Water Pollution Control Act, as amended (Water Act), 33 U.S.C. 1251, et seq., and Executive
Order 11738, the Owner agrees to:
(a)

Not utilize any facility in the performance of this Agreement or any subcontract which is
listed on the EPA list of Violating Facilities pursuant to Part 15 of the regulations for the
duration of time that the facility remains on the list;

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2.4

(b)

Promptly notify the PHA if a facility the Owner intends to use in the performance of this
Agreement is on the EPA List of Violating Facilities or the Owner knows that is has been
recommended to be placed on the List;

(c)

Comply with all requirements of the Air Act and the Water Act, including the requirements of Section 114 of the Air Act and Section 308 of the Water Act, and all applicable
clean air standards and clear water standards; and

(d)

Include or cause to be included the provisions of this section in every subcontract, and
take such action as HUD may direct as a means of enforcing such provisions.

HUD-FEDERAL LABOR STANDARDS PROVISIONS.
The Owner is responsible for inserting the entire text of Sections 2.4 (a) and (b) of this Agreement in all construction contracts and, if the Owner performs any rehabilitation work on the
project, the Owner must comply with all provisions of Section 2.4(a) and (b).
(a)(1)(i) Minimum Wages. All laborers and mechanics employed or working upon the site of the
work (or under the United States Housing Act of 1937 or under the Housing Act of 1949
in the construction or development of the project), will be paid unconditionally and not
less often than once a week, and without subsequent deduction or rebate on any account
(except such payroll deductions as are permitted by regulations issued by the Secretary of
Labor under the Copeland Act (29 CFR Part 3)), the full amount of wages and bona fide
fringe benefits (or cash equivalents thereof) due at time of payment computed at rates not
less than those contained in the wage determination of the Secretary of Labor which is
attached hereto and made part hereof regardless of any contractual relationship which
may be alleged to exist between the contractor and such laborers and mechanics. Contributions made or costs reasonably anticipated for bona fide fringe benefits under Section
l(b)(2) of the Davis-Bacon Act on behalf of laborers or mechanics are considered wages
paid to such laborers or mechanics, subject to the provisions of 29 CFR 5.5(a)(1)(iv);
also, regular contributions made or costs incurred for more than a weekly period (but not
less often than quarterly) under plans, funds, or programs, which cover the particular
weekly period, are deemed to be constructively made or incurred during such weekly
period.
Such laborers and mechanics shall be paid the appropriate wage rate and fringe benefits
on the wage determination for the classification of work actually performed, without
regard to skill, except as provided in 29 CFR Part 5.5(a)(4). Laborers or mechanics
performing work in more than one classification may be compensated at the rate specified for each classification for the time actually worked therein: Provided, That the

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employer’s payroll records accurately set forth the time spent in each classification in
which work is performed. The wage determination (including any additional classification and wage rates conformed under 29 CFR Part 5.5(a)(1)(ii) and the Davis-Bacon
poster (WH-1321)) shall be posted at all times by the contractor and its subcontractors at
the site of the work in a prominent and accessible place where it can be easily seen by the
workers.
(ii)

(A)

Any class of laborers or mechanics which is not listed in the wage determination and
which is to be employed under the contract shall be classified in conformance with the
wage determination. HUD shall approve an additional classification and wage rate and
fringe benefits therefore only when the following criteria have been met:
(1)

The work to be performed by the classification requested is not performed by a
classification in the wage determination; and

(2)

The classification is utilized in the area by the construction industry, and

(3)

The proposed wage rate, including any bona fide fringe benefits, bears a reasonable relationship to the wage rates contained in the wage determination.

(B)

If the contractor and the laborers and mechanics to be employed in the classification (if
known), or their representatives, and HUD or its designee agree on the classification and
wage rate (including the amount designated for fringe benefits where appropriate), a
report of the action taken shall be sent by HUD or its designee to the Administrator of the
Wage and Hour Division, Employment Standards Administration, U.S. Department of
Labor, Washington, D. C. 20210. The Administrator, or an authorized representative,
will approve, modify, or disapprove every additional classification action within 30 days
of receipt and so advise HUD or its designee or will notify HUD or its designee within
the 30-day period that additional time is necessary. (Approved by the Office of Management and Budget under OMB control number 1215-0140.)

(C)

In the event the contractor, the laborers or mechanics to be employed in the classification
or their representatives, and HUD or its designee do not agree on the proposed classification and wage rate (including the amount designated for fringe benefits, where appropriate), HUD or its designee shall refer the questions, including the views of all interested
parties and the recommendation of HUD or its designee, to the Administrator for determination. The Administrator, or an authorized representative, will issue a determination

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within the 30 days of receipt and so advise or its designee or will notify HUD or its
designee within 30-day period that additional time is necessary. (Approved by the Office
of Management and Budget under OMB Control Number 1215-0140).

(2)

(D)

The wage rate (including fringe benefits where appropriate) determined pursuant to
subparagraphs (1)(B) or (C) of this paragraph, shall be paid to all workers performing
work in the classification under this contract from the first day on which work is performed in the classification.

(iii)

Whenever the minimum wage rate prescribed in the contract for a class of laborers or
mechanics includes a fringe benefit which is not expressed as an hourly rate, the contractor shall either pay the benefit as stated in the wage determinations or shad pay another
bona fide fringe benefit or an hourly cash equivalent thereof.

(iv)

If the contractor does not make payments to a trustee or other third person, the contractor may consider as part of the wages of any laborer or mechanic the amount of any
costs reasonably anticipated in providing bona fide fringe benefits under a plan or
program, Provided, That the Secretary of Labor has found, upon the written request of
the contractor, that the applicable standards of the Davis-Bacon Act have been met. The
Secretary of Labor may require the contractor to set aside in a separate account assets
for the meeting of obligations under the plan or program. (Approved by the Office of
Management and Budget under OMB Control Number 1215-0140).

Withholding. HUD or its designee shad upon its own action or upon written request of an
authorized representative of the Department of Labor withhold or cause to be withheld from the
contractors under this contract or any other Federal contract with the same prime contractor, or
any other Federally-assisted contract subject to Davis-Bacon prevailing wage requirements,
which is held by the same prime contractor so much of the accrued payments or advances as may
be considered necessary to pay laborers and mechanics, including apprentices, trainees and
helpers, employed by the contractor or any subcontractor the fun amount of wages required by
the contract. In the event of failure to pay any laborer or mechanic, including any apprentice,
trainee or helper, employed or working on the site of the work (or under the United States
Housing Act of 1937 or under the Housing Act of 1949 in the construction or development of the
project), all or part of the wages required by the contract, HUD or its designee may, after written
notice to the contractor, sponsor, applicant, or owner, take such action as may be necessary to
cause the suspension of any further payment, advance, or guarantee of funds until such violations
have ceased. HUD or its designee may, after written notice to the contractor, disburse such
amounts withheld for and on account of the contractor or

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subcontractor to the respective employees to whom they are due. The Comptroller General shall
make such disbursements in the case of direct Davis-Bacon Art contracts
(3)(i)

Payrolls and basic records. Payrolls and basic records relating thereto shall be maintained by the contractor during the course of the work and preserved for a period of three
years thereafter for all laborers and mechanics working at the site of the work (or under
the United States Housing Act of 1937, or under the Housing Act of 1949, in the construction or development of the project). Such records shall contain the name, address,
and social security number of each such worker, his or her correct classification, hourly
rates of wages paid (including rates of contributions or costs anticipated for bona fide
fringe benefits or cash equivalents thereof of the types described in the Section l(b)(2)(B)
of the Davis-Bacon Act), daily and weekly number of hours worked, deductions made
and actual wages paid. Whenever the Secretary of Labor has found under 29 CFR 5.5
(a)(1)(iv) that the wages of any laborer or mechanic include the amount of any costs
reasonably anticipated in providing benefits under a plan or program described in Section
l(b)(2)(B) of the Davis-Bacon Act, the contractor shall maintain records which show that
the commitment to provide such benefits is enforceable, that the plan or program is
financially responsible, and that the plan or program has been communicated in writing
to the laborers or mechanics affected, and records which show the costs anticipated or the
actual cost incurred in providing such benefits. Contractors employing apprentices or
trainees under approved programs shall maintain written evidence of the registration of
apprenticeship programs and certification of trainee programs, the registration of the
apprentices and trainees, and the ratios and wage rates prescribed in the applicable
programs. (Approved by the Office of Management and Budget under OMB Control
Numbers 1215-0140 and 1215-0017).

(ii)

(A)

The contractor shall submit weekly for each week in which any contract work is
performed a copy of all payrolls to HUD or its designee if the agency is a party
to the contract, but if the agency is not such a party, the contractor will submit
the payrolls to the applicant, sponsor, or owner, as the case may be, for transmission to HUD or its designee. The payrolls submitted shall set out accurately and
completely all of the information required to be maintained under 29 CFR Part
5.5(a)(3)(i). This information may be submitted in any form desired. Optional
Form WH-347 is available for this purpose and may be purchased from the
Superintendent of Documents (Federal Stock Number 029-005-00014-1), U.S.
Government Printing Office, Washington, DC 20402. The

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prime contractor is responsible for the submission of copies of payrolls
by all subcontractors. (Approved by the Office of Management and
Budget under OMB Control Number 12150149.)
(B)

Each payroll submitted shall be accompanied by a “Statement of Compliance,” signed by the contractor or subcontractor or his or her agent
who pays or supervises the payment of the persons employed under the
contract and shall certify the following:
(1)

That the payroll for the payroll period contains the information
required to be maintained under 29 CFR Part 5.5 (a)(3)(i) and
that such information is correct and complete;

(2)

That each laborer or mechanic (including each helper, apprentice, and trainee) employed on the contract during the payroll
period has been paid the full weekly wages earned, without
rebate, either directly or indirectly, and that no deductions have
been made either directly or indirectly from the fun wages
earned, other than permissible deductions as set forth in 29 CFR
Part 3;

(3)

That each laborer or mechanic has been paid not less than the
applicable wage rates and fringe benefits or cash equivalents for
the classification of work performed, as specified in the applicable wage determination incorporated into the contract.

(C)

The weekly submission of a properly executed certification set forth on
the reverse side of Optional Form WH-347 shall satisfy the requirement
for submission of the “Statement of Compliance” required by paragraph
(a)(3)(ii)(B) of this section.

(D)

The falsification of any of the above certifications may subject the
contractor or subcontractor to civil or criminal prosecution under Section
1001 of Title 18 and Section 231 of Title 31 of the United States Code.

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(iii)

(4)(i)

The contractor or subcontractor shall make the records required under paragraph
(a)(3(i) of this section available for inspection, copying, or transcription by
authorized representatives of HUD or its designee or the Department of Labor,
and shall permit such representatives to interview employees during working
hours on the job. If the contractor or subcontractor fails to submit the required
records or to make them available, HUD or its designee may, after written notice
to the contractor, sponsor, applicant, or owner, take such action as may be
necessary to cause the suspension of any further payment, advance, or guarantee
of funds. Furthermore, failure to submit the required records upon request or to
make such records available may be grounds for debarment action pursuant to 29
CFR, Part 5.12.
Apprentices and Trainees. Apprentices. Apprentices will be permitted to work
at less than the predetermined rate for the work they performed when they are
employed pursuant to and individually registered in a bona fide apprenticeship
program registered with the U.S. Department of Labor, Employment and Training Administration, Bureau of Apprenticeship and Training, or with a State
Apprenticeship Agency recognized by the Bureau, or if a person is employed in
his or her first 90 days of probationary employment as an apprentice in such an
apprenticeship program, who is not individually registered in the program, but
who has been certified by the Bureau of Apprenticeship and Training or a State
Apprenticeship Agency (where appropriate) to be eligible for probationary
employment as an apprentice. The allowable ratio of apprentices to journeymen
on the job site in any craft classification shall not be greater than the ratio
permitted to the contractor as to the entire work force under the registered
program. Any worker listed on a payroll at an apprentice wage rate, who is not
registered or otherwise employed as stated above, shall be paid not less than the
applicable wage rate on the wage determination for the classification of work
actually performed. In addition, any apprentice performing work on the job site
in excess of the ratio permitted under the registered program shall be paid not
less than the applicable wage rate on the wage determination for the work
actually performed. Where a contractor is performing construction on a project
in a locality other than that in which its program is registered, the ratios and
wage rates (expressed in percentages of the journeymen’s hourly rate) specified
in the contractor’s or subcontractor’s registered program shall be observed.
Every apprentice must be paid at not less than the rate specified in the registered
program for the apprentice’s level of progress, expressed as a percentage of the
journeymen hourly rate specified in the applicable wage determination. Apprentices shall be paid hinge benefits in accordance with the provisions of the apprenticeship program. If the apprenticeship program does not specify fringe benefits,
apprentices must be paid the full amount of fringe benefits listed on the wage

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determination for the applicable classification. If the Administrator determines
that a different practice prevails for the applicable apprentice classification,
fringes shall be paid in accordance with that determination. In the event the
Bureau of Apprenticeship and Training, or a State Apprenticeship Agency
recognized by the Bureau, withdraws approval of an apprenticeship program, the
contractor will no longer be permitted to utilize apprentices at less than the
applicable predetermined rate for the work performed until an acceptable program is approved.
(ii)

Trainees. Except as provided in 29 CFR 5.16, trainees will not be permitted to
work at less than the predetermined rate for the work performed unless they are
employed pursuant to and individually registered in a program which has received prior approval, evidenced by formal certification by the U.S. Department
of Labor, Employment and Training Administration. The ratio of trainees to
journeymen on the job site shall not be greater than permitted under the plan
approved by the Employment and Training Administration. Every trainee must
be paid at not less than the rate specified in the approved program for the
trainee’s level of progress, expressed as a percentage of the journeyman hourly
rate specified in the applicable wage determination. Trainees shall be paid fringe
benefits in accordance with the provisions of the trainee program. If the trainee
program does not mention fringe benefits, trainees shall be paid the full amount
of fringe benefits listed on the wage determination unless the Administrator of
the Wage and Hour Division determines that there is an apprenticeship program
associated with the corresponding journeyman wage rate on the wage determination which provides for less than full fringe benefits for apprentices. Any
employee listed on the payroll at a trainee rate who is not registered and participating in a training plan approved by the Employment and Training Administration shall be paid not less than the applicable wage rate on the wage determination for the classification of work actually performed. In addition, any trainee
performing work on the job site in excess of the ratio permitted under the registered program shall be paid not less than the applicable wage rate on the wage
determination for the work actually performed. In the event the Employment
and Training Administration withdraws approval of a program, the contractor
will no longer be permitted to utilize trainees at less than the applicable predetermined rate for the work performed until an acceptable program is approved.

(iii)

Equal employment opportunity. The utilization of apprentices, trainees and
journeymen under this part shall be in conformity with the equal employment
opportunity requirements of Executive Order 11246, as amended, and 29 CFR,
Part 30.

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(5)

Compliance with Copeland Act requirements. The contractor shall
comply with the requirements of 29 CFR, Part 3 which are incorporated
by reference in this contract.

(6)

Subcontracts. The contractor or subcontractor will insert in any subcontracts the clauses contained in Section 2.4(a)(1) through (10) and such
other clauses as HUD or its designee may by appropriate instructions
require, and also a clause requiring the subcontractors to include these
clauses in any lower tier subcontracts. The prime contractor shall be
responsible for the compliance by any subcontractor or lower tier
subcontractor with all the contract clauses in this Section 2.4(a).

(7)

Contract terminations; debarment. A breach of the contract clauses in 29
CFR, 5.5 may be grounds for termination of the contract, and for debarment as a contractor and a subcontractor as provided in 29 CFR, 5.12.

(8)

Compliance with Davis-Bacon and Related Act Requirements. All
rulings and interpretations of the Davis-Bacon and related Acts contained in 29 CFR, Parts 1, 3, and 5 are herein incorporated by reference
in this contract.

(9)

Disputes concerning labor standards. Disputes arising out of the labor
standards provisions of this contract shall not be subject to the general
disputes clause of this contract. Such disputes shall be resolved in
accordance with the procedures of the Department of Labor set forth in
29 CFR, Parts 5, 6, and 7. Disputes within the meaning of this clause
include disputes between the contractor (or any of its subcontractors) and
HUD or its designee, the U. S. Department of Labor, or the employees or
their representatives.

(10)

(i)

Certification of Eligibility. By entering into this contract, the
contractor certifies that neither it (nor he or she) nor any person
or firm who has an interest in the contractor’s firm is a person or
firm ineligible to be awarded Government contracts by virtue of
Section 3(a) of the Davis-Bacon Act or 29 CFR 5.12(a)(1) or to
be awarded HUD contracts or participate in HUD programs
pursuant to 24 CFR, Part 24.

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(b)

(ii)

No part of this contract shall be subcontracted to any person or
firm ineligible for award of a Government contract by virtue of
Section 3(a) of the Davis-Bacon Act or 29 CFR 5.12(a)(1) or to
be awarded HUD contracts or participate in HUD programs
pursuant to 24 CFR Part 24.

(iii)

The penalty for making false statements is prescribed in the U.S.
Criminal Code, 18 U.S.C. 1001. Additionally, U.S. Criminal
Code, Section 1010, Title 18, U.S.C., “Federal Housing Administration transactions, provides in part: “Whoever, for the
purpose of ...influencing in any way the action of such
Administration...makes, utters or publishes any statement,
knowing the same to be false... shall be fined not more than
$5,000 or imprisoned not more than two years, or both.”

Contract Work Hours and Safety Standards Act. As used in this paragraph, the terms “laborers” and “mechanics” include watchmen and
guards.
(1)

Overtime requirements. No contractor or subcontractor contracting for any part of the contract work which may require or
involve the employment of laborers or mechanics shall require
or permit any such laborer or mechanic in any workweek in
which he or she is employed on such work to work in excess of
forty hours in such workweek unless such laborer or mechanic
receives compensation at a rate not less than one and one-half
times the basic rate of pay for all hours worked in excess of forty
hours in such workweek.

(2)

Violation; liability for unpaid wages; liquidated damages. In the
event of any violation of the clause set forth in subparagraph (1)
of this paragraph, the contractor and any subcontractor responsible therefore shall be liable for the unpaid wages. In addition,
such contractor and subcontractor shall be liable to the United
States (in the case of work done under contract for the District of
Columbia or a territory, to such District or to such territory), for
liquidated damages. Such liquidated damages shall be computed
with respect to each individual laborer or mechanic, including
watchmen and

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ref. Handbook 7420.8

guards, employed in violation of the clause set forth in subparagraph (1) of this paragraph, in the sum of $10 for each calendar
day on which such individual was required or permitted to work
in excess of the standard workweek of forty hours without
payment of the overtime wages required by the clause set forth
in subparagraph (1) of this paragraph.
(3)

Withholding for unpaid wages and liquidated damages. HUD or
its designee shall upon its own action or upon written request of
an authorized representative of the Department of Labor withhold or cause to be withheld, from any monies payable on
account of work performed by the contractor or subcontractor
under any such contract or any other Federal contract with the
same prime contractor, or any other Federally-assisted contract
subject to the Contract Work Hours and Safety Standards Act,
which is held by the same prime contractor such sums as may be
determined to be necessary to satisfy any liabilities of such
contractor or subcontractor for unpaid wages and liquidated
damages as provided in the clause set forth in subparagraph (2)
of this paragraph.

(4)

Subcontractors. The contractor or subcontractor shall insert in
any subcontracts the clauses set forth in subparagraph (1)
through (4) of this paragraph and also a clause requiring the
subcontractors to include these clauses in any lower tier subcontracts. The prime contractor shall be responsible for compliance
by any subcontractor or lower tier subcontractor with the clauses
set forth in subparagraphs (1) through (4) of this paragraph.

2.5-2.7 RESERVED.
2.8

WAGE CLAIMS AND ADJUSTMENTS.
The Owner shall be responsible for the correction of all violations under Section 2.4, including
violations committed by other contractors. In cases where there is evidence of underpayment of
salaries or wages to any laborers or mechanics (including apprentices and trainees) by the Owner
or other contractor or a failure by the Owner or other contractor to submit payrolls and related
reports, the Owner shall be required to place an amount in escrow, as determined by HUD
sufficient to pay persons employed on the work covered by the Agreement the difference between the salaries or wages actually paid such employees for the total number of hours worked
and the full amount of wages required under this Agreement, as well as an amount determined by
HUD to be sufficient

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ref. Handbook 7420.8

to satisfy any liability of the Owner or other contractor for liquidated damages pursuant to
Section 2.4. The amounts withheld may be disbursed by HUD for and on account of the Owner or
other contractor to the respective employees to whom they are due, and to the Federal Government in satisfaction of liquidated damages under Section 2.4.
2.9

RESERVED.

2.10

EVIDENCE OF UNIT(S) COMPLETION; ESCROW.

2.11

(a)

The Owner shall evidence the completion of the unit(s) by furnishing the PHA in addition to the requirements listed in Section 1.6 of this Agreement, a certification of compliance with the provisions of Sections 2.4 and 2.8 of this Agreement, and that to the best of
the Owner’s knowledge and belief there are no claims of underpayment to laborers or
mechanics in alleged violation of these provisions of the Agreement. In the event there
are any such pending claims to the knowledge of the Owner, the PHA, or HUD, the
Owner will place a sufficient amount in escrow, as directed by the PHA or HUD, to
assure such payments.

(b)

The escrows required under Sections 2.8 and 2.10 shall be paid to HUD, as escrowee, or
to an escrowee designated by HUD, and the conditions and manner of releasing such
escrows shall be designated and approved by HUD.

FLOOD INSURANCE.
If the project is located in an area that has been identified by the Federal Emergency Management Agency as an area having special flood hazards and if the sale of flood insurance has been
made available under the National Flood Insurance Program, the Owner agrees that the project
will be covered, during its anticipated economic or useful life, by flood insurance in an amount at
least equal to its development or project cost (less estimated land cost) or to the limit of coverage
made available with respect to the particular type of property under the National Flood Insurance
Act of 1968, whichever is less.

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HUD-52531-B (12/88)
ref. Handbook 7420.8